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A Picture of Wage Inequality and the Allocation of Labour Through a Period of Trade Liberalisation: The Case of Brazil

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Author Info
Francis Green ()
Andy Dickerson ()
Jorge Saba Arbache ()

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Abstract

This paper constructs a picture of the labour market impact of trade liberalisation in Brazil. We examine the level and dispersion of wages, the skilled wage premium, and employment composition before and after trade liberalisation. After trade reform, there was a rise in the returns to college education which, since the share of college workers also rose, is attributable to rising demand. This change did not increase overall wage dispersion because of the small share of college-educated workers and of decreasing returns to intermediate levels of education. Among tradable goods industries, trade liberalisation is associated with increases in relative wages.

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File URL: ftp://ftp.ukc.ac.uk/pub/ejr/RePEc/ukc/ukcedp/0013.pdf
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Publisher Info
Paper provided by Department of Economics, University of Kent in its series Studies in Economics with number 0013.

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Date of creation: Dec 2000
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Handle: RePEc:ukc:ukcedp:0013

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Postal: Department of Economics, University of Kent at Canterbury, Canterbury, Kent, CT2 7NP
Phone: +44 (0)1227 764000
Fax: +44 (0)1227 827850
Web page: http://www.ukc.ac.uk/economics/

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Related research
Keywords: trade liberalisation; wage inequality; skill premium; employment; Brazil; Latin America;

Other versions of this item:

Find related papers by JEL classification:
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Robbins, Donald & Gindling, T H, 1999. "Trade Liberalization and the Relative Wages for More-Skilled Workers in Costa Rica," Review of Development Economics, Blackwell Publishing, vol. 3(2), pages 140-54, June. [Downloadable!] (restricted)
  2. Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December. [Downloadable!] (restricted)
  3. John P. Haisken-DeNew & Christoph M. Schmidt, . "Inter-Industry and Inter-Region Differentials: Mechanics and Interpretation," Working Papers 9504, SELAPO Center for Human Resources. [Downloadable!]
  4. Amann, Edmund & Baer, Werner, 2000. "The Illusion of Stability: The Brazilian Economy Under Cardoso," World Development, Elsevier, vol. 28(10), pages 1805-1819, October. [Downloadable!] (restricted)
  5. David O’Connor & Maria Rosa Lunati, 1999. "Economic Opening and the Demand for Skills in Developing Countries: A Review of Theory and Evidence," OECD Development Centre Working Papers 149, OECD, Development Centre. [Downloadable!]
  6. Wood, Adrian, 1997. "Openness and Wage Inequality in Developing Countries: The Latin American Challenge to East Asian Conventional Wisdom," World Bank Economic Review, Oxford University Press, vol. 11(1), pages 33-57, January.
  7. Gordon H. Hanson & Ann Harrison, 1999. "Trade liberalization and wage inequality in Mexico," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 52(2), pages 271-288, January.
  8. Moreira, Mauricio Mesquita & Correa, Paulo Guilherme, 1998. "A first look at the impacts of trade liberalization on Brazilian manufacturing industry," World Development, Elsevier, vol. 26(10), pages 1859-1874, October. [Downloadable!] (restricted)
  9. Pissarides, Christopher A, 1997. "Learning by Trading and the Returns to Human Capital in Developing Countries," World Bank Economic Review, Oxford University Press, vol. 11(1), pages 17-32, January.
  10. Donald R. Davis, 1996. "Trade Liberalization and Income Distribution," Harvard Institute of Economic Research Working Papers 1769, Harvard - Institute of Economic Research.
    Other versions:
  11. Eli Berman & John Bound & Stephen Machin, 1998. "Implications Of Skill-Biased Technological Change: International Evidence," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1245-1279, November. [Downloadable!] (restricted)
    Other versions:
  12. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May. [Downloadable!] (restricted)
    Other versions:
  13. Raymond Robertson, 2000. "Trade Liberalisation and Wage Inequality: Lessons from the Mexican Experience," The World Economy, Blackwell Publishing, vol. 23(6), pages 827-849, 06. [Downloadable!] (restricted)
  14. Currie, Janet & Harrison, Ann E, 1997. "Sharing the Costs: The Impact of Trade Reform on Capital and Labor in Morocco," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S44-71, July. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Andy Dickerson & Francis Green & Jorge Saba Arbache, 2001. "Trade Liberalization and the Returns to Education: A Pseudo-panel Approach," Studies in Economics 0114, Department of Economics, University of Kent. [Downloadable!]
  2. Richard B. Freeman, 2003. "Trade Wars: The Exaggerated Impact of Trade in Economic Debate," NBER Working Papers 10000, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Blom, Andreas & Holm-Nielsen, Lauritz & Verner, Dorte, 2001. "Education, earnings, and inequality in Brazil, 1982-98 - implications for education policy," Policy Research Working Paper Series 2686, The World Bank. [Downloadable!]
  4. Fabio Veras Soares, 2004. "Some Stylized Facts Of The Informal Sector In Brazil In The Last Two Decades," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32th Brazilian Economics Meeting] 142, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
  5. Daniel Miles & Máximo Rossi, 2001. "Wage Inequality in Developing Countries: Market Forces or Government Intervention," Documentos de Trabajo (working papers) 1001, Department of Economics - dECON. [Downloadable!]
  6. de Souza Ferreira Filho, Joaquim Bento & Horridge, Mark, 2009. "Would Trade Liberalization Help the Poor of Brazil?," Agricultural Distortions Working Paper 52795, World Bank. [Downloadable!]
  7. Sergei Soares & Luciana M. Santos Servo & Jorge Saba Arbache, 2001. "O que (não) Sabemos sobre a Relação entre Abertura Comercial e Mercado de Trabalho no Brasil," Anais do XXIX Encontro Nacional de Economia [Proceedings of the 29th Brazilian Economics Meeting] 048, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
  8. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," NBER Working Papers 12885, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  9. Sara Lemos, 2004. "A Menu Of Minimum Wage Variables For Evaluating Wages and Employment Effects: Evidence From Brazil," Labor and Demography 0403009, EconWPA. [Downloadable!]
    Other versions:
  10. Jorge Saba Arbache, 2001. "Trade Liberalisation and Labor Markets in Developing Countries: Theory and Evidence," Studies in Economics 0112, Department of Economics, University of Kent. [Downloadable!]
  11. Martin Rama, 2002. "Globalization and Workers in Developing Countries," Economics Study Area Working Papers 41, East-West Center, Economics Study Area. [Downloadable!]
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